The Explosion in Genetic Testing — and How To Manage It


Payers must be early adopters of managing genetic testing through DEX Z-Codes, combined with science-based policies and policy adherence and claims editing technology.

Jason Bush, Ph.D.

Jason Bush, Ph.D.

The potential of genetic testing for improving healthcare is enormous, but its full benefits will not be realized under our current system of managing lab tests.

The boom in genetic testing has outgrown our processes for managing it. While the number of tests continues to rise, payers, providers, and patients need help with which tests to order, how to pay for them, and how to use the test results.

Healthcare needs a better process for managing genetic testing. Developing that process begins with understanding the deficiencies of the current system.

Five challenges of genetic testing

The utilization of genetic testing and the precision medicine it enables is limited by several challenges that must be addressed:

1) Growth of costly genetic tests

Genetic testing is expensive and expanding. Medicare Part B payments to laboratories for genetic tests grew from $289 million in 2015 to $1.9 billion in 2021, accounting for 20% of Medicare spending for lab tests that year.

2) Lack of genetic test specificity

Current Procedural Terminology (CPT) codes lack the specificity to enforce coverage policy rules. New tests are created faster than the codes to identify them. There are only ~500 CPT codes for the more than 175,000 genetic tests on the market.

3) Test order and provider confusion

Test results inform 70% of care decisions, but one-third of genetic tests are ordered in error. If the correct test is not requested, the chances of delivering the right treatment decrease. Clinicians without training in genetics may find it challenging to order and interpret these tests correctly.

4) Payer's lack of access to clinical evidence and regulation on test quality

The industry lacks a universal process to verify that test manufacturers' claims are valid. Payers lack the expertise to analyze medical necessity and appropriateness of genetic tests. Without details on clinical utility or validity for each genetic test ordered, payers cannot review test quality and control costs while ensuring the quality of care.

5) Fraud, waste and abuse

All of the above factors create opportunities for fraud, waste, and abuse. In 2022 alone, there was more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and DME schemes, according to the Department of Justice. Another problem is panel stuffing when labs add tests with no clinical value to panels.

The solutions

Overcoming these challenges requires a new approach to test management and coding. Here are some common-sense steps that would significantly improve the process:

Improving test identification and quality with precision coding

Incorporating Diagnostic Exchange test identification codes (DEXZ-Codes® into genetic test management offers an established, scalable quality component endorsed by CMS with a significant national adoption rate. A DEX Z-Code is matched to each genetic test, which promotes transparency so payers and members know the specific test conducted and how it should be reimbursed. The codes reduce the need for prior authorization and appeals because their specificity drives the use of approved quality tools and maximizes automated reviews.

Mapping evidence-based policies to precise codes

Specialized coding is a start. Still, Z-Codes must be paired with scientifically proven quality assurance policies to deliver decision-making specificity and improve the quality of care. These policies must contain a detailed, evidence-based review that includes analytical and clinical validity and utility.

Improving utilization management and prior authorization

Coverage guidelines linked to DEX Z-Codes increase clarity and specificity for commercial utilization management (UM) review. This provider-friendly, real-time prior authorization portal minimizes abrasion by informing physicians of genetic testing requirements. They can handle prior authorization, so turnaround time is reduced.

Using technology for policy adherence and payment integrity

This approach closes the gap between a payer's UM and payment integrity teams by making policy adherence easier and aligning plan coverage expectations.

Network management

Creating a preferred genetic testing network streamlines clinical decision support even further. A network reduces prior authorization requests by creating transparency into test validity while speeding up payment.

Benefits of improved genetic test management

Aligning DEX Z-Codes, scientifically backed policies, and technology clarifies decision-making and improves the experience for all stakeholders.

Providers and members see faster approvals thanks to the reduced need for prior authorization. It also leads to more straightforward claims adjudication because discrete codes increase the clarity and specificity of commercial UM review. For these reasons, providers can request and bill for genetic tests with greater confidence that they can provide the proper care.

Labs will see fewer prior authorization requests due to increased auto-approval rates through Z-Code policy mapping and real-time clinical policy adherence. Quality of care will be improved by ensuring the proper test is provided. Lastly, physicians and patients will be more satisfied because of real-time approvals, reduced appeals, and a less abrasive process.

Payers will enjoy increased compliance with state Medicaid and Medicare Advantage coverage rules and transparency into test quality. Cost control will improve through specificity in genetic test coverage and an increase in policy enforcement. The new coding will help payment integrity and reduce the potential for fraudulent billing.

A better-managed future

Genetic testing will continue to grow in usage until the point it becomes part of routine wellness exams. Physicians, patients, and payers expect access to the information to guide personalized care.

To bring this about, payers must be early adopters of managing genetic testing through DEX Z-Codes, combined with science-based policies and policy adherence and claims editing technology, to ensure payment accuracy. CMS and commercial payers using this process have proven that genetic testing precision aligns payer reimbursement with test authorization, achieves affordability, and increases market competitiveness – all important to achieving value-based care.

Jason Bush, Ph.D., is executive vice president, product at Avalon Healthcare Solutions.

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